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RECEIVED DEC 1 S 2003 <br /> <br /> VIRGINIA <br /> credit <br /> Urllon <br /> LEAGUE <br /> <br />~07 ~nwi¢~ <br /> P.O. Box 11469 <br />Lynchburg,Virginia <br /> 24506-1469 <br /> <br />800.768.3344 <br />434.237.9600 <br />fax 434.239.8148 <br />www. vacuLorg <br /> <br />December 18, 2003 <br /> <br />Dear Local Government Official: <br /> <br />The Virginia Credit Union League represents 232 state and federal credit unions in <br />Virginia with more than 3 million members who are Virginia citizens. Virginians <br />have strong and loyal ties to their credit unions, whether they are in the military, <br />government, or private sector. <br /> <br />Credit unions are member-owned, not-for-profit financial cooperatives. Created <br />under the authority of state or federal laws, credit unions offer member-owners <br />limited personal financial services. Because they do not issue stock or dividends to <br />investors, the member owners receive higher interest rotes on their deposits and <br />lower cost loans. Benefits are also passed on to member-owners because credit <br />unions do not pay exorbitant salaries and stock options to management. Credit <br />unions exist solely for the benefit of their member-owners and focus on low- and <br />moderate-income people; whereas, other financial institutions focus on serving <br />corporate entities and commercial accounts. <br /> <br />Many Virginia credit unions have chosen to be chartered and regulated by the <br />Commonwealth of Virginia. Though they can easily convert to federal credit union <br />status and avoid state regulation and any new tax aimed at state-chartered credit <br />unions, many want to retain their Virginia charter because they serve state <br />government employees or local government employees. <br /> <br />Virginia's credit unions are dedicated to serving the communities where they are <br />located. Credit unions support their schools and public services through the payment <br />of real estate and personal property taxes. In addition, state-chartered credit unions <br />pay sales tax and a significant assessment to the Commonwealth for their regulatory <br />examinations. Some have proposed taxing the assets or income of credit unions. <br />Since credit unions are not-for-profit and pass any financial gains beyond required <br />capital and loan-loss reserves to their members, it makes no sense to impose an <br />income tax on them. Currently members pay income taxes directly to the <br />government by their income taxes, much like subchapter S corporations or <br />partnerships. <br /> <br />Virginia credit unions are growing in relative size, not because their assets are <br />increasing so dramatically, but because banks keep on moving their headquarters to <br />states other than Virginia. Virtually every major bank has left Virginia, while credit <br />unions keep their headquarters in the community. <br /> <br />'.~ A M E R I C A'S <br /> CREDIT UNIONS' <br /> <br /> <br />